<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
....................................................................
2) Aggregate number of securities to which transaction applies:
....................................................................
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount of which the filing fee
is calculated and state how it was determined):
....................................................................
4) Proposed maximum aggregate value of transaction:
....................................................................
5) Total fee paid:
....................................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
...................................................
2) Form, Schedule or Registration Statement No.:
...................................................
3) Filing Party:
...................................................
4) Date Filed:
...................................................
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
PROXY STATEMENT
The enclosed proxy is solicited by Peter S. Balise and James M.
Koller on behalf of the Board of Directors (the "Board") of The Publishing
Company of North America, Inc. (the "Company") for use at the annual meeting of
shareholders to be held on May 28, 1998 at 1:30 p.m. at the Company's corporate
office located at 186 P.C.N.A. Parkway, Lake Helen, Florida, 32744. Such
solicitation is being made by mail, and the Company may also use its officers to
solicit proxies from shareholders either in person or by telephone or letter
without extra compensation. All expenses of this solicitation will be paid by
the Company. Since proxies are being solicited by the Board, it may be deemed to
have a conflict of interest in recommending how shareholders vote for the
proposals. An inherent conflict of interest may arise from the Board
recommending their own re-election. A proxy may be revoked by delivering a
written notice of revocation to the principal office of the Company or in person
at the meeting at any time prior to the voting thereof. If a shareholder wishes
to give a proxy to someone other than management, he or she may cross out the
names appearing on the enclosed proxy form, insert the name of some other
person, sign and give the form to that person for use at the meeting.
Only shareholders of record at the close of business on April 15,
1998 (the "Record Date") are entitled to notice of, and to vote at, the meeting.
Each share of common stock outstanding on the record date is entitled to one
vote on all proposals. Messrs. Peter Balise and D. Scott Plakon, the Company's
President and former Executive Vice-President, respectively, as of the record
date owned of record an aggregate of 1,760,200 shares of the Company's common
stock, equal to 36.2% of the outstanding stock. As of the close of business on
April 15, 1998, 4,863,100 shares of common stock of the Company were
outstanding.
All proposals require a vote of the majority of the shareholders
present in person or by proxy except for the election of directors who shall be
elected by a plurality of such votes. Proxies which abstain on one or more
proposals and "broker non-votes" will be deemed present for quorum purposes for
all proposals to be voted on at the meeting. Broker non-votes occur where a
broker holding stock in street name votes the shares on some matters but not
others. The missing votes are broker non-votes. Client directed abstentions are
not broker non-votes. Abstentions and broker non-votes are counted in
tabulations of the votes cast on proposals presented to the shareholders and
will have the same effect as a vote against the proposals. Shareholders whose
shares are in street name and do not return a proxy are not counted for any
purpose and are neither an abstention nor a broker non-vote. Shareholders who
sign, date and return a proxy but do not indicate how their shares are to be
voted are giving management full authority to vote their shares as they deem
best for the Company.
This proxy statement and the accompanying proxy are first being
mailed to shareholders on or about May 8, 1998.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth the number of shares of the Company's
voting stock beneficially owned as of April 15, 1998 by (i) those persons known
to be by the Company owners of more than 5% of the Company's common stock, (ii)
each director of the Company, and (iii) all executive officers and directors of
the Company as a group:
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Amount and
Nature of
Name and Address of Beneficial Percent of
Class Beneficial Ownership Ownership(1) Class
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock Peter S. Balise 1,113,725(2) 22.9%
and Vested The Publishing Company of
Options North America, Inc.
186 P.C.N.A. Parkway
Lake Helen, FL 32744-0280
Common Stock D. Scott and Suzanne Plakon 656,475(3) 13.5%
2532 Rivertree Circle
Sanford, FL 32771
Common Stock James M. Koller 17,600(4) *
and Vested The Publishing Company of
Options North America, Inc.
186 P.C.N.A. Parkway
Lake Helen, FL 32744-0280
Common Stock Matt Butler 78,000(5) 1.6%
and Vested 731 N. 156th Avenue
Options Omaha, NE 68127
Common Stock Mark and Lee Golden 312,000(6) 6.4%
1110 S.W. Ivanhoe Blvd., Unit 20
Orlando, FL 32804
Common Stock Michael S. Paul 362,500(7)(8) 7.5%
College Directory Publishing,Inc.
1000 Conshohocken Road, 4th Floor
Conshohocken, PA 19428
Common Stock John S. Rafanello 362,500(8) 7.5%
College Directory Publishing,Inc.
1000 Conshohocken Road, 4th Floor
Conshohocken, PA 19428
Common Stock Richard Silver 77,500(9)(10) 1.6%
and Vested 13160 Doubletree Circle
Options Wellington, FL 33414
- -----------------------------------------------------------------------------------------------------
All directors and executive officers
of the Company as a group (six persons) 2,305,800 46.9%
(2)(4)(5)(7)(9)(10)
* Less than 1% of class
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</TABLE>
2
<PAGE>
1 Beneficial ownership has been determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934 and includes shares
underlying any options which vest within 60 days of the Record Date,
I.E., April 15, 1998. Unless otherwise noted, the Company believes that
all persons named in the table have sole voting and investment power
with respect to all securities beneficially owned by them.
2 Includes 10,000 shares of common stock underlying vested options.
Does not include 40,000 shares of stock underlying unvested options
granted pursuant to the Company's 1996 Stock Plan (the "Plan").
3 All shares are owned by Mr. and Mrs. Plakon as tenants by the
entireties. Does not give effect to the private sale of 100,000 shares
of common stock owned by Mr. and Mrs. Plakon subsequent to the Record
Date. See Item 1. "Related Party Transactions".
4 Includes 7,400 shares of common stock underlying vested stock
options. Does not include 19,600 shares underlying unvested options
granted pursuant to the Plan.
5 Includes 10,000 shares of common stock underlying vested options and
3,000 shares of common stock granted pursuant to the Company's Plan.
6 Includes 212,000 shares owned jointly by Mr. and Mrs. Golden as tenants
by the entireties and 100,000 shares of common stock owned
individually by Mrs. Golden. Mr. Golden disclaims all beneficial
ownership as to the 100,000 shares owned by his wife.
7 Owned by Mr. Paul as tenants by the entireties with his wife,
Stephanie S. Paul.
8 See Item 1. "Related Party Transactions" concerning an agreement to
sell these shares back to the Company.
9 Mr. Silver is serving on the Company's Board as the designee of the
underwriter (the "Underwriter") of the Company's initial public
offering (the "IPO"). Includes 19,500 shares of common stock underlying
vested warrants exercisable at $6.60 per share issued to the
Underwriter and transferred to Mr. Silver. Includes 5,000 shares of
common stock underlying vested options and 3,000 shares of common stock
granted pursuant to the Company's Plan. Includes 50,000 shares of
common stock owned by Mr. Silver's mother. Mr. Silver disclaims
beneficial ownership as to the shares owned by his mother.
10 Does not give effect to 50,000 shares of common stock acquired by
Mr. Silver subsequent to the Record Date. See Item 1. "Related
Party Transactions".
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
The business of the Company is managed under the direction of the
Board. It has responsibility for establishing broad corporate policies and
for the overall performance of the Company. It is not, however, involved in
the operating details on a day-to-day basis. The Board is kept advised of the
Company's business through regular written communications and discussions
with management.
The Company has not paid any cash compensation to any person for
serving as a director. The Company does not intend to compensate non-employee
directors for serving as directors except to reimburse them for expenses
incurred in connection with their service as directors and to issue automatic
grants of stock and non-qualified stock options pursuant to the Plan as
described herein. Directors who are employees receive no compensation for
serving as directors; however, they are reimbursed for out-of-pocket expenses
incurred in connection with their service as directors.
3
<PAGE>
BOARD MEETINGS AND COMMITTEES
The Board of the Company held four meetings during the fiscal
year ended December 31, 1997. All directors attended the meeting of the
Board in person or by telephone.
The Company has established a compensation committee and an audit
committee which are comprised of Messrs. Balise, Butler and Silver, and
Messrs. Butler and Silver, respectively. During fiscal 1997 the compensation
committee held two meetings and executed unanimous consents on two occasions.
The audit committee held one meeting in 1997.
The compensation committee administers the Company's Plan and makes
recommendations to the full Board concerning compensation, including incentive
arrangements, of the Company's officers and key employees.
The audit committee reviews the engagement of the independent
accountants and reviews the independence of its auditors. The audit committee
also reviews the audit and non-audit fees of the independent accountants and the
adequacy of the Company's internal accounting controls.
CURRENT BOARD OF DIRECTORS
- ------------------ ----- -------------------------- ------- --------- --------
POSITION
NAME AGE WITH COMPANY SINCE TERM ENDING
- ------------------ ----- -------------------------- ------- --------- --------
PETER S. BALISE 39 CHAIRMAN OF THE BOARD, 1996 3 YEARS 1999
PRESIDENT AND SECRETARY
- ------------------ ----- -------------------------- ------- --------- --------
D. SCOTT PLAKON 39 DIRECTOR 1996 3 YEARS 1999
- ------------------ ----- -------------------------- ------- --------- --------
MATT BUTLER 39 DIRECTOR 1996 2 YEARS 1998
- ------------------ ----- -------------------------- ------- --------- --------
MICHAEL S. PAUL 31 DIRECTOR 1998 3 YEAR 2000
- ------------------ ----- -------------------------- ------- --------- --------
RICHARD SILVER 45 DIRECTOR 1997 3 YEAR 2000
- ------------------ ----- -------------------------- ------- --------- --------
ITEM 1. ELECTION OF DIRECTORS
One Class B director is to be elected at the annual meeting. The
Company's Articles, as amended, provide for a staggered Board designed to
elect approximately one-third of the directors each year. Initially, Class A
directors serve a three-year term, Class B directors serve a two-year term
and Class C directors serve a one-year term, with subsequent terms being
three years for all classes. Messrs. Balise and Plakon are Class A directors,
Mr. Butler is a Class B director, and Messrs. Paul and Silver are Class C
directors currently elected to serve three-year terms. This year, as a Class
B director only Mr. Butler is up for re-election. Accordingly, the Company's
principal shareholders will vote concerning Mr. Butler's election. If
elected, Mr. Butler will hold office for a three-year term until the annual
meeting of shareholders held in 2001 and his successor is elected and
qualified.
4
<PAGE>
The nominee for the Board is set forth below. The proxy holders
intend to vote all proxies received by them for the nominee for director listed
below unless instructed otherwise. In the event Mr. Butler is unable or declines
to serve as a director at the time of the annual meeting, the proxies will be
voted for any nominee who shall be designated by the present Board to fill the
vacancy. Mr. Butler is currently running in the Nebraska primary as a candidate
for Lieutenant Governor. The primary is scheduled shortly after the Company's
annual meeting. If nominated, Mr. Butler intends to resign as a director. The
Class B director shall be elected by a plurality of the votes of the shares cast
at the annual meeting.
NOMINEE FOR ELECTION TO BOARD OF DIRECTORS
----------------- ----- --------------- ------- -------------
POSITION WITH
NAME AGE THE COMPANY SINCE NEW TERM
----------------- ----- --------------- ------- -------------
MATT BUTLER 39 DIRECTOR 1996 3 YEARS
----------------- ----- --------------- ------- -------------
MATT BUTLER became a director of the Company in June 1996. From
November 1992 to date, Mr. Butler has been the Chairman and Chief Executive
Officer of Butler Holdings, Inc., the parent company of Hunt Transportation,
Inc., Omaha, Nebraska, which is engaged in the transportation of agricultural
and construction machinery and equipment throughout the United States.
Previously, from 1988 to November 1992, Mr. Butler was Vice President of
Butler Holdings, Inc.
OTHER DIRECTORS
PETER S. BALISE founded the Company and has been its President
and Secretary since inception and was its Treasurer until March 1996. He was
elected Chairman of the Board in March 1996 when the Company amended its
articles of incorporation to eliminate shareholder management. From prior to
1991 to September 1993, Mr. Balise was President of the Company's
predecessor. From September 1993 through March 15, 1994, Mr. Balise was an
employee of the Company's predecessor.
D. SCOTT PLAKON has been a director of the Company since March
1996. Prior to his resignation in April 1998, Mr. Plakon had been the
Company's Executive Vice President since September 1994 and Treasurer since
March 1996. From November 1990 through September 1994, Mr. Plakon was Branch
Manager and Associate Vice President of Chatfield Dean & Co., Inc., a
broker-dealer with its principal office located in Greenwood Village,
Colorado.
MICHAEL S. PAUL has been a director of the Company since January
1998. Since the Company acquired College Directory Publishing, Inc.
("CDP") in July 1997, Mr. Paul has been that subsidiary's chief executive
officer. Prior to that time, Mr. Paul was the founder and chief executive
officer of CDP's predecessor.
RICHARD SILVER, ESQ. is currently a private investor. From
March 1995 through May, 1997, Mr. Silver was a managing director of
Laidlaw Equities, Inc., which was the Underwriter of the Company's IPO.
From April 1994 through March 1995, Mr. Silver was Director of Closed End
Funds with Prudential Securities, Inc. From June 1991 through June 1993,
Mr. Silver was a principal with Cambridge Financial. Mr. Silver is admitted
to practice law in the State of New York and previously was an associate
with the national law firm of Weil, Gotchal & Manges in New York, New
York specializing in taxation.
5
<PAGE>
NON-DIRECTOR EXECUTIVE OFFICER
JAMES M. KOLLER has been the Company's Chief Financial Officer
since January 1996. Prior to that time, from October 1990 through December
1995, Mr. Koller was Chief Financial Officer and Vice President of Kearney
Systems, Inc., Orlando, Florida.
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect
to the annual and long-term compensation of the Company's Chief Executive
Officer and each executive officer and former executive officer who received
compensation exceeding $100,000 for the fiscal years ended December 31, 1995,
1996 and 1997.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- -----------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION
- -----------------------------------------------------------------------------------------------------------------
(A) (B) (C) (E) (I)
NAME AND PRINCIPAL OTHER ANNUAL ALL OTHER
POSITION YEAR SALARY ($) COMPENSATION ($) COMPENSATION ($)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EXECUTIVE OFFICER
PETER S. BALISE, 1997 $ 109,662(11) $ 2,609(12) $ 0
CHIEF EXECUTIVE OFFICER, PRESIDENT SECRETARY AND 1996 $ 104,039 $ 2,388(12) $ 3,677(13)
CHAIRMAN OF THE BOARD 1995 $ 74,000 $ 1,905(12) $174,399(14)
- -----------------------------------------------------------------------------------------------------------------
FORMER EXECUTIVE OFFICER
D. SCOTT PLAKON, 1997 $ 101,583(16) $ 5,162(12) $ 0
EXECUTIVE VICE PRESIDENT 1996 $ 83,577 $ 4,781(12) $ 2,594(17)
AND TREASURER(15) 1995 $ 61,263 $ 2,050(12) $116,266(18)
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
11 Includes $7,629 paid pursuant to Mr. Balise's employment agreement for
unused vacation time.
12 Consists of payment of health insurance premiums.
13 Consists of $1,040 paid by the Company as its matching contribution to
Mr. Balise's 401(k) account and $2,637 in interest paid on a promissory
note for 1995 Subchapter S income which was paid in 1996. See "Related
Party Transactions".
14 Consists of 1995 Subchapter S income distributed in 1996.
15 Mr. Plakon's resigned as an officer and employee of the Company in
April 1998.
16 Includes $3,692 paid pursuant to Mr. Plakon's employment agreement for
unused vacation time.
17 Consists of $836 paid by the Company as its matching contribution to
Mr. Plakon's 401(k) account and $1,758 in interest paid on a
promissory note for 1995 Subchapter S income which was paid in 1996.
18 Consists of 1995 Subchapter S income distributed in 1996.
6
<PAGE>
EXECUTIVE COMPENSATION AGREEMENTS
In May 1996, the Company entered into three-year written
employment agreements with Messrs. Peter S. Balise and D. Scott Plakon.
The agreements provided for base annual salaries of $100,000 and
$96,000, respectively, subject to annual cost of living increases. Their
employment agreements provided for annual bonuses at the discretion of
the Board. Mr. Balise also is entitled to use a Company automobile.
Mr. Balise has voluntarily agreed to reduce his salary from approximately
$100,000 to approximately $50,000 effective in May 1998. In exchange, the
Company granted Mr. Balise 50,000 vested options exercisable at $5.50 per
share which was substantially above fair market value. See "Related Party
Transactions".
Mr. Plakon resigned as an employee on April 17, 1998. In
connection with his resignation, the Company and Mr. Plakon entered into an
agreement terminating Mr. Plakon's employment agreement with the Company
thereby eliminating the Company's liability to pay Mr. Plakon for the
remaining 13 months (May 1999). Mr. Plakon agreed to perform consulting
services for the Company on an "as needed" basis in exchange for the Company
paying health insurance costs for Mr. Plakon and his dependents through May
1999. Additionally, the Company purchased 50,000 shares of the Company's
common stock at $1.00 per share from Mr. Plakon. See "Related Party
Transactions".
Mr. James M. Koller, the Company's Chief Financial Officer,
receives a salary of $70,000 per annum pursuant to an oral agreement. Each of
the Company's executive officers also receive full reimbursement of health
insurance premiums rather than the one-half which all other employees receive.
In April 1996, the Company established a 401(k) Salary Reduction
Plan covering substantially all employees with six months of service or more.
Participants may contribute up to 15% of his or her annual compensation. The
Company's matching contribution is determined annually by the Board. The
Company's contribution for 1997 was approximately $8,000.
The Company does not have any other formal pension, profit
sharing or such other similar plans pursuant to which it pays additional cash
or non-cash compensation to its employees including the individuals specified
above.
1996 STOCK PLAN
The Company has adopted (and the shareholders have approved) the
Plan for employees, consultants and directors covering 500,000 shares of common
stock. The Plan provides for the grant to employees of incentive stock options
("ISOs") within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), and for the grant of non-qualified stock options
(collectively "Options"). The Plan also provides for the grant of restricted
common stock.
As of March 31, 1998, the Company had 396,600 outstanding Options
exercisable from $1.88 to $6.25 per share including 50,000 Options held by Mr.
Balise, the Company's Chief Executive Officer, 17,000 Options held by Mr. James
M. Koller, the Company's Chief Financial Officer, and 55,000 Options granted to
former consultants. See "Related Party Transactions". Generally, options granted
vest at the rate of one-fifth each December 31st, subject to continued
employment' automatic grants to directors who are not employees or 10%
shareholders, vest at the rate of one-third each December 31st subject to
continued Board service. Once vested, Options may be forfeited under certain
circumstances.
7
<PAGE>
The Plan is intended to comply with Section 16(b) of the Securities
Exchange Act of 1934 and Rule 16b-3 promulgated thereunder and other applicable
laws and is administered by the Board. The Board has the power to determine
eligibility to receive Options, the terms of any Options including the exercise
price, the number of shares subject to the Options, the vesting schedule and the
term of any such Options. The exercise price of all Options granted under the
Plan must be at least equal to the fair market value of the shares of common
stock on the date of grant. With respect to any participant who owns common
stock possessing more than 10% of the voting power of the Company's outstanding
common stock, the exercise price of any ISO granted must equal at least 110% of
the fair market value on the grant date and the maximum term of the ISO must not
exceed five years. The terms of all other Options granted under the Plan may not
exceed 10 years.
The Plan provides for an automatic grant of 3,000 shares of common
stock and 15,000 Options to any non-employee director who is not a 10%
shareholder, both of which vest annually over a three-year term each December
31, provided that such person is still serving as a director on the vesting
date. The sole consideration for the grant of the shares of common stock and
Options consists of the service as a director. As provided for in the Plan, the
exercise price of the Options is the closing price of the Company's common stock
on the last business day prior to the grant of Options.
The following table gives information as to all common stock and
Options to purchase the Company's common stock which were granted to each
outside director of the Company pursuant to the above automatic grant provisions
of the Plan.
- -------------------- -------------------- ---------------- -----------------
OUTSIDE DIRECTORS GRANTS OF STOCK AND
STOCK OPTIONS AS OF APRIL 15, 1998(19)
- -------------------- -------------------- ---------------- -----------------
Average Option
Date of Number of Exercise Price
Name Grant Options/Shares Per Share
- -------------------- -------------------- ---------------- -----------------
Matt Butler June 18, 1996 15,000 / 3,000 $6.25
- -------------------- -------------------- ---------------- -----------------
Richard Silver May 28, 1997 15,000 / 3,000 $2.50
- -------------------- -------------------- ---------------- -----------------
19 As of April 15, 1998 no options have been exercised.
RELATED PARTY TRANSACTIONS
Peter S. Balise has voluntarily agreed to reduce his salary by 50%
beginning in May 1998, the start of the third year of his employment contract
with the Company. In conjunction with that action, the Company granted Mr.
Balise Options to purchase 50,000 shares of stock exercisable at $5.50 per
share, substantially in excess of the requirement of 110% of fair market value.
On April 14, 1998, the Company entered into a definitive
agreement to sell CDP to an investment group including the two former
shareholders and current management of CDP. The agreement provides for, among
other things, the return of the 750,000 common shares of the Company issued
by it when it acquired CDP. The transaction is expected to close by June 2,
1998, subject to certain contingencies.
8
<PAGE>
In late April 1998, the Company purchased 50,000 shares of
common stock at $1.00 per share from D. Scott Plakon and his wife. Mr. Plakon
is a director and was executive vice president of the Company. Also in late
April 1998, Mr. Richard Silver purchased 50,000 shares of common stock from
Mr. and Mrs. Plakon at $.75 per share.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), requires the Company's officers, directors and persons who
own more than ten percent of a registered class of the Company's equity
securities to file reports of ownership and changes in ownership with the
Securities and Exchange Commission (the "SEC"). To the best of the Company's
knowledge based solely on its review of copies of such forms received or filed
by it, or written representations from certain reporting persons, all filings of
Form 3, 4 and 5 required to be made with the SEC have been made.
ITEM 2. APPOINTMENT OF AUDITORS
Ernst & Young, LLP ("E&Y"), independent certified public
accountants, currently acts as the independent auditors of the Company and has
been selected by the Board to act as auditors for the fiscal year ended December
31, 1998, subject to shareholder approval. Unless directed to vote no, proxies
being solicited will be voted in favor of the ratification of E&Y as independent
auditors for the Company's fiscal year ended December 31, 1998. E&Y acted as
auditors for the Company for the fiscal year ended December 31, 1997. A
representative of E&Y will be present at the meeting to respond to questions.
Ratification of the appointment of E&Y as the Company's independent
auditors for fiscal 1998 will require the affirmative vote of at least a
majority of the votes represented in person or by proxy at the annual meeting.
Proxies solicited by management will be voted for the proposal unless instructed
otherwise.
ITEM 3. OTHER MATTERS
The Board has no knowledge of any other matters which may come
before the meeting and does not intend to present any other matters. However, if
any other matters shall properly come before the meeting or any adjournment
thereof, the persons soliciting proxies will have the discretion to vote as they
see fit unless directed otherwise.
If you do not plan to attend the meeting, in order that your shares
may be represented and in order to assure the required quorum, please sign, date
and return your proxy promptly. In the event you are able to attend the meeting,
at your request, the Company will cancel the proxy.
9
<PAGE>
SHAREHOLDERS' PROPOSALS
Any shareholder of the Company, who wishes to present a proposal to
be considered at the 1999 annual meeting of the shareholders of the Company and
who wishes to have such proposal presented in the Company's proxy statement for
such meeting, must deliver such proposal in writing to the Company no later than
December 31, 1998.
The Company will furnish without charge to any shareholder
submitting a written request a copy of the Company's annual report on Form
10-KSB as filed with the Securities and Exchange Commission including financial
statements and schedules thereto. Such written request should be directed to
James M. Koller at the Company offices located at 186 P.C.N.A Parkway, Lake
Helen, Florida, 32744-0280.
By the Order of the Board of Directors
/s/ Peter S. Balise
--------------------------------------
Peter S. Balise, Secretary
10
